THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY

USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT

POLICY

Date:

GAIN Report Number:

Approved By:

Prepared By:

Report Highlights:

Food processing is one of the major sectors in Greece, holding about 21 percent of the total sales and accounting

for around 25 percent of the Greek manufacturing industry. More than 10 percent of the Greek labor force works

in supplying raw materials to the food processing industry through farming. Food and beverage manufacturing, in

turn, provides jobs to more than 20 percent of the employed population. A large proportion of raw materials has to

be imported.

Ornella Bettini

Jim Dever

2011

Food Processing Ingredients

Greece

GR1118

12/20/2011

Required Report - public distribution

Post:

SECTION I. MARKET SUMMARY

SECTION II. ROAD MAP FOR MARKET ENTRY

SECTION III. COMPETITION

SECTION IV. BEST PRODUCT PROSPECTS

SECTION V. POST CONTACT AND FURTHER INFORMATION

SECTION I. MARKET SUMMARY

Greek Economy Overview

With a population of approximately 11 million, and a Gross Domestic Product (GDP) of about $305 billion,

Greece is a relatively small country. Greece adopted the Euro as its new common currency in January 2002.

Greece has a capitalist economy with the public sector accounting for about 40 percent of GDP and with per

capita GDP about two-thirds that of the leading euro-zone economies. The Greek economy grew by nearly 4

percent per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens

Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer

spending.

However, the economy went into recession in 2009 because of the world financial crisis, tightening credit

conditions and Athens' failure to address a growing budget deficit triggered by falling state revenues and

increased government expenditures. The economy contracted by 2 percent in 2009 and 4.8 percent in 2010.

Greece violated the EU's Growth and Stability Pact budget deficit criterion of no more than 3 percent of GDP

from 2001 to 2006, but finally met that criterion in 2007-08, before exceeding it again in 2009, with the deficit

reaching 15.4 percent of GDP and 10.6 percent in 2010. In response to Greece's fiscal crisis, the government

passed two austerity programs designed to cut the budget deficit to 7.6 percent of GDP by the end of 2011.

These included a hike in the top rate of the VAT, an increase in excise taxes and a steep cut in the pay of civil

servants. Pension reforms also included a limit on early retirement, an increase in the retirement age to 65 for

both men and women and an index linking benefits to prices.

By May 2011, it appeared highly likely that the original deficit target of 7.6 percent in 2011 would not be met. In

an effort to plug a newly emerging deficit shortfall of €2 billion, the government agreed in September 2011 to

levy an emergency tax on private property in 2011 and 2012. To appease its creditors, the government prepared a

new economic-recovery program, including asset sales and spending cuts of €76 billion. In the evening of

Tuesday, 6 December, Greece issued austerity measure for 2012 in order to display the government's

commitment to meet its public spending with regard to its foreign creditors, the European Union (EU) and the

International Monetary Fund (IMF). The 2012 budget foresees a fourth year of recession with the economy

contracting by 2.8 percent. It also projects a primary surplus of 1 percent of gross domestic product (excluding

Rome

interest payment on debt). The 2012 budget will cut wages, increase taxes, and lay off thousands of civil servants

and is expected to reduce public deficit to 9 percent of GDP in 2011. The new coalition government set up on 11

November by Lucas Papademos will pledge to introduce the second Greek bailout (decided upon in October

2011), which will provide the country with a second loan of €130 billion by 2014. Greece’s long-term goal is to

cut the government deficit to less than 3 percent of GDP by 2014 and bring it down to 1 percent by the end of

2015.

Structure of the Economy

Greece has a predominately service economy, which accounts for over 78 percent of GDP. Tourism provides 15

percent of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled

jobs. Almost 9 percent of the world’s commercial shipping is Greek-owned, making the Greek commercial fleet

the largest in the world. Other important sectors include food processing, tobacco, textiles, chemicals (including

refineries), pharmaceuticals, cement, glass, telecommunication, and transport equipment. Agricultural output has

steadily decreased in importance over the last decade, accounting now for only 5 percent of total GDP compared

to a 17 percent in the early 1990’s.

The Greek Food Processing Sector

Food processing is one of the major sectors in Greece, holding about 21 percent of the total sales and accounting

for around 25 percent of the Greek manufacturing industry. The Greek economy is highly dependent on the food

and beverage industry. More than 10 percent of the Greek labor force works in supplying raw materials to the

food processing industry through farming. Food and beverage manufacturing, in turn, provides jobs to more than

20 percent of the employed population. Most of the food manufacturing companies are family-based and former

artisans (more than 97 percent of Greek enterprises are categorized as “Micro”) specialized in the production of

food from local agriculture.

Food and Beverage Processing Industry in Greece 2011 (US$ mln)

Source: Euromonitor

Greece is an import-dependent country, with the EU countries supplying the majority of food products. Greece’s

top five suppliers are Netherlands, Germany, France, and Italy while the main importers of Greece’s goods are Italy,

Germany, Turkey, Bulgaria, and United Kingdom. Greek primary agricultural imports include cheese, beef, wheat,

pork, and sugar. Olives dominate Greece's food exports, followed by canned peaches, cotton, olive oil, and cheese.

In 2010, tree nuts and soybeans were the leading U.S. agricultural exports to Greece, while olives, processed fruits,

vegetables, and cheeses were the leading Greek agricultural exports to the United States. Major processed food

products exported include processed fish (frozen), prepared or preserved peaches, prepared and preserved

vegetables, cheese and dairy products (mainly yogurt and the worldwide famous “feta”), olives, oil, and wine.

Advantages and Challenges for U.S. Exporters in Greece

Advantages Challenges

Greece needs agricultural imports to sustain its food

and feed processing industry.

U.S. exporters new to the Greek market may find the

Greek bureaucracy difficult to maneuver.

There are strong private sectors trading ties

between the U.S. and Greece in certain products.

There are widespread biases against U.S. food as inferior

in favor of Greek and Mediterranean diets.

Greek importers favor U.S. products because

of good quality and wider variety.

Non-tariff barriers such as phytosanitary restrictions and

traceability requirements hinder U.S. exports.

EU enlargement creates new market opportunities

for the Greek food processing industry.

Biotech products are prohibited in Greece.

SECTION II: ROAD MAP FOR MARKET ENTRY

A. ENTRY STRATEGY

Eighty per cent of Greece’s import trade is handled through sales agents or distributors. Distributors operate on

wholesale (and in some cases, retail) basis with exclusive sales rights for certain districts or for the entire country.

There are over 300,000 trading establishments in Greece, often small, family-owned and operated businesses,

each of which deals in a narrow range of foods. There are 7,700 corporations and limited liability companies

engaged in wholesale trade and 3,200 corporations and limited liability companies handling retail trade.

Food and beverage products of U.S. origin, which comply with EU rules and regulations, do not require special

permits (nor are they subject to special rules or regulations) for commercialization in Greece. However, biotech

products are handled quite strictly. If a U.S. food product, other than food supplements, conforms to any single

EU member state’s rules and regulations, that product can then be transshipped and sold in any other EU member

state.

As a member of the EU, the Common Agricultural Policy (CAP) governs Greece’s agricultural sector. Similarly,

Greece employs the same tariffs and border measures as the other EU member states. Product imported into

Greece must meet all Greek and EU food safety and quality standards, as well as labeling and packaging

regulations. It is important to work with experienced importers, and/or have an agent to work with Greek

regulatory authorities to ensure the acceptability of specific products. Personal relationships and language ability

are of value when conducting business transactions. It is also advisable for the agent to contact health authorities

at the port of entry as interpretation of health directives may vary from port to port. For more information on

Product Trade Restrictions, Food Standards and Regulations, please refer to Post’s FAIRS GAIN Report

GR1107.

Tariffs are based on the Harmonized System, with duties levied on imports from non-European Union (EU) on an

ad valorem cost, insurance, and freight (CIF) basis. Import duty is five to seven per cent for most products when

charged. Most raw materials for manufacturing input can be imported without duties, or with minimal duties

only. Preferential tariffs and EU trade barriers are applied.

Greece is a World Trade Organization (WTO) member and applies both European Union (EU) mandated and

Greek government-initiated trade barriers. As a member state of the EU since January 1981, is fully harmonized

with EU regulations, directives, and legislation pertaining Agricultural production, Ag Trade and Food. Import

licenses are required for all agricultural commodities, processed food products, and ingredients. Special licenses

and phytosanitary certification are required for imports from third countries where certain plant and animal

diseases occur. Special import licenses are required for goods, including plant propagation material, seeds,

textiles, meet products, pet foods, and wood products, while aflatoxin content certificates are required for all tree

nuts imported from third countries including the U.S. A number of products are under surveillance according to

EU quotas (i.e., beef meat).

Exporters to Greece must seek advice from importers on the quota system for certain goods. The Common

Agricultural Policy (CAP) covers most agricultural product imports, under which many items (including cereals,

rice, milk, and milk products, beef and veal, olive oil, dried fruit, and sugar) are subject to variable levies and a

complicated protection system.

Occasionally, non-tariff barriers are imposed by GOG in an attempt to protect local production in years when

stocks are piling (i.e., grain imports from third countries priced at lower levels from that domestically produced).

Non-tariff barriers are imposed in the form of intensified sampling and laboratory testing for GMO, heavy metals,

radioactivity, plant disease, and aflatoxin content. Most frequently, such strict controls take place for cereal

shipments from third countries (originating mostly in the Black sea, Romania, Bulgaria, and Kazakhstan).

B. MARKET STRUCTURE

The following diagram gives an overview of the distribution channels for imported food ingredients in Greece.

Trader

Wholesaler Distributor Retail HRI

Processor

U.S.Exporter

U.S. firms exporting food to the Greek market contact a trade agent that could be either an intermediary between

them and local transformation companies, or an import/export company that buys the American food and sells it

to Greek distributors/retailers/wholesalers/HDI. In the Greek market, it is common for big-size retailers and

wholesalers to be present in more than one stage of the production chain at the same time.

C. COMPANY PROFILES

The following table provides a list of 20 major players in the Greek food and beverage processing market. Most

of these firms are multinational companies that usually import their products directly, without the intervention of

trade intermediaries.

Company Turnover (€ End-Use Product

million) Channels

Coca-Cola Hellenic

Bottling Company 609.0

Retail and

HRI Non-alcoholic beverages

Athenian Brewery S.A. 440.8 Retail and

HRI Beer, beverages

Nestlè Hellas S.A. 350.1 Retail and

HRI

Coffee, ice cream. Bottling of natural mineral

water

Soya Hellas S.A. 245.7 Retail and

HRI

Soybean and sunflower oils; soy meal and sun

meal; lecithin, seed oils, tropical oils,

vegetable fats, and margarine

Glaxosmithkline S.A. 227.0 Retail and

HRI

Medicines, soft drinks, fruit juices, and

personal care products

Delta Foods S.A. 212.4 Retail and

HRI Dairy Products, fruit juices, chocolate drinks

Mevgal S.A.

Dairy Product Industry 183.4

Retail and

HRI

Dairy products, fruit jelly, and ready-to-drink

coffee

Kraft Foods Hellas S.A. 133.4 Retail and

HRI Food products

Elanthi Industrial and

Commercial S.A. of foods 130.0

Retail and

HRI

Olive oil, seed oil, vegetable oils, cooking

fats, and tomato products

Olympus Larisa

Dairy Industry S.A. 127.4

Retail and

HRI

Products and cheese (in third party facilities).

Production of fruit juices

Tyras S.A. 120.1 Retail and

HRI Yogurt and cheese

PepsiCo – Ivi S.A. 106.2 Retail and

HRI

Soft drinks, soda water, condensed and

natural fruit juices and ice-tea. Bottling of

mineral water

Chipita S.A. 100.0 Retail and

HRI

Salty snacks, croissants, confectionery and

bakery products

Pernod Ricard Hellas S.A. 82.7 Retail and

HRI Beverages and vinegar

Loulis Mills S.A. 77.5 Retail and

HRI Flour and by-products

Mythos Brewery S.A. 74.5 Retail and

HRI Beer

Epirotiki Bottling Co.

"Vikos" S.A. 69.0

Retail and

HRI

Bottling of natural mineral water and table

water. Production of soft drinks.

Agno S.A. 66.0 Retail and

HRI

Dairy products, cheese, ice cream, fruit juices

and natural mineral water

Evga S.A. 65.2 Retail and

HRI

Ice cream, fruit juices, soft drinks, frozen

dough products, and croissants

Chitos S.A. 45.2 Retail and

HRI Mineral water, beverages

Source: Kompass

SECTION III. COMPETITION

Greece’s main competitor is the European Union. Greece’s top five suppliers are Netherlands, Germany, France,

and Italy while the main importers of Greece’s goods are Italy, Germany, Turkey, Bulgaria, and United Kingdom.

Greek primary agricultural imports include cheese, beef, wheat, pork, and sugar. Olives dominate Greece's food

exports, followed by canned peaches, cotton, olive oil, and cheese. In 2010, tree nuts and soybeans were the

leading U.S. agricultural exports to Greece, while olives, processed fruits, vegetables, and cheeses were the

leading Greek agricultural exports to the United States. Major processed food products exported include

processed fish (frozen), prepared or preserved peaches, prepared and preserved vegetables, cheese and dairy

products (mainly yogurt and the worldwide famous “feta”), olives, oil, and wine.

Bilateral Ag Trade 2010

U.S. Ag Exports to Greece $140 M U.S. Ag Imports from Greece $ 280 M

- Tree Nuts: $32 million - Canned Olives: $88 million

- Tobacco: $22 million - Cheese: $20 million

- Soybeans: $20 million - Canned Peaches: $20 million

The United States exports both Bulk and Consumer products to Greece.

Greece exports mainly Consumer products to the United States.

U.S. Ag Trade Balance with Greece:

-250.0

-200.0

-150.0

-100.0

-50.0

0.0

50.0

Mill

ion

$

U.S. Imports of Agriculture, Fish, and Forestry products from Greece

FY 2005-2011

(In Thousands of Dollars)

Product 2005 2006 2007 2008 2009 2010 2011 %Chg Processed Fruit and 96,948 87,159 126,985 114,159 100,860 125,693 143,811 14.41

Vegetables

Seafood Products 5,834 7,572

9,290

12,635

14,108

16,656

24,691

48.24

Cheese 15,710 15,501 17,873

18,814 20,500 20,273 23,198 14.43

Vegetable Oil 14,912 21,377 22,128 22,184

19,738 17,628 17,623 -0.03

Wine and Beer 9,428

9,337 10,228 10,086 9,995 9,956 11,056 11.0

Snack Foods 5,225 6,524

17,526 21,746

8,432 4,579 5,847

27.71

Hides and Skins 31

0 1 92 132 4,129

4,928 19.3

Tobacco 42,735

40,014 30,349

29,374 22,717 6,775 4,041

-40.3

Roasted and Instant

Coffee

1,338 1,562 1,805

1,691 2,234

2,417

2,338

-3.26

Other Dairy

Products

7,847

13,969 26,693 26,542 887

1,468 1,544 5.17

Ag, Fish and

Forest Products

209,134

212,039

272,388

267,337

206,287

216,693

248,981

14.90

Source: BICO

U.S. Exports of Agriculture, Fish, and Forestry products to Greece

FY 2005-2011

(In Thousands of Dollars)

Product 2005 2006 2007 2008 2009 2010 2011 %Chg

Tree Nuts 62,099

60,939

47,268

61,292

36,446

36,384

25,415

-30.15

Soybeans

11,036 14 4,519 9,661 14,134 8,406 21,078 150.73

Hides and Skins

5,908 4,874 9,511 8,575 2,960 8,742 13,550 55.00

Tobacco

28,334 20,226 30,653 23,157 17,278 21,658 12,318 -43.19

Fish Products

3,302

4,739

6,961

7,582

8,739

5,229

6,132

17.28

Processed Fruit and

Vegetables

2,454

1,726

3,192

3,501

3,752

3,788

4,851

28.06

Hardwood 12,428

13,288

12,971

15,279

8,670

9,559

4,737

-50.45

Snack Foods

1,859

2,737

3,036

3,464

2,670

3,069

3,495

13.87

Pulses

2,018 1,818 1,201 1,875 1,910 1,242 3,122 151.26

Poultry Meat

13,058

5,977

7,788

9,917

9,523

6,121

2,795

-54.33

Ag, Fish and

Forest Products

172,946

145,657

157,030

176,329

146,137

128,774

121,718

-5.48

Source: BICO

SECTION IV. BEST PRODUCT PROSPECTS

A. U.S. products in the Greek market that have good sales potential:

- Frozen food

- Frozen and salted fish

- Tree nuts

- Pulses

B. Products not present in significant quantities but which have good sales potential:

- Meat

- Wine

- Beer

- Juices and soft drinks

- Organic foods

- Dairy products

- Chocolate, ice cream, and confectionary

- Food ingredients

- Snack foods

- Readymade meals

C. Products not present because they face significant trade barriers:

- Turkey and other poultry products

- Beef meat and products

- Processed food products containing biotech ingredients

- Low volume high value food ingredients

- Corn oil

- U.S. milling wheat

SECTION V. POST CONTACT AND FURTHER INFORMATION

USDA FAS Contacts in Rome, Italy

American Embassy

Foreign Agricultural Service

Via Vittorio Veneto 119/A

00187 Rome

Italy

Tel: +011 39 06 4674 2307

Fax: +011 39 06 4788 7008

E-mail: agathens@fas.usda.gov

agrome@fas.usda.gov

Webpage: http://italy.usembassy.gov/agtrade.html

Counselor for Agricultural Affairs Jim Dever

Agricultural Assistant Ornella Bettini

Key Greek Government Agencies and Associations

Ministry of Rural Development and Food

Directorate of Plant Production

Phytosanitary and Plant Protection Division

150, Sygrou Avenue

17671 Athens-Kallithea

Greece

Phone: +30 210 9287232; +30 210 9287233

Fax: +30.210.9287234

E-mail: syg059@minagric.gr; syg042@minagric.gr

Greek Ministry of Economy and Finance General Secretary of IT-Systems

Section of Customs

1, Chandri Street

GR 18346 Athens Greece

Tel: +30 210 480 2400

Fax: +30 210 480 2400

E-mail: a.manta@gsis.gr, info@gsis.gr

Website: http://www.gsis.gr

Hellenic Food Safety Authority (EFET)

Central Division

124, Avenue and 2 Iatridou

11526 Ambelokipi PC Athens

Greece

Tel: +30 210 6971 500

Fax: +30 210 6971 501

E-mail: info@efet.gr

Website: www.efet.gr

General Chemical State Laboratory

Directorate of Foods

16, A. Tsoha Str, GR 11521 Athens

Greece

Tel.: +30 210 6479 251

Fax: +30 210 6467 725

Email: gxk-foodiv@ath.forthnet.gr

Website: http://www.gcsl.gr/index.asp?a_id=136

General Customs and Excise Department 10, Kar. Serbias

GR-10184 Athens

Greece

Tel: +30 210 3375 000; 210 3375 714; 210 3375 715

Fax: +30 210 3375 034

E-mail: gdcustom@otenet.gr

Website: http://www.e-oikonomia.gr

Payment and Control Agency for Guidance and Guarantee

Community Aid (OPEKEPE) 241, Acharnon

GR-10446 Athens

Greece

Tel: +30 210 212 49 03

Fax: +30 867 0503

Website: http://www.opekepe.gr

Hellenic Export Promotion Organization (HEPO)

86-88, Marinou Antypa

163 46 Hellioupolis Athens

Greece

Tel.: +30 210 9982100

Fax: +30 210 9969100

Website: www.hepo.gr

E-mail: infocenter@hepo.gr

Pan-Hellenic Confederation of Unions of Agriculture Cooperatives (PASEGES)

26, Arkadias

11526, Athens

Greece

Tel: +30 2107499425 – 0030 2107499445

Fax: +30 2107779313

E-mail: info@paseges.gr ; papadopoulou@paseges.gr

Website: www.paseges.gr

Hellenic Association of Frozen Food

226, Pireos Str.

17778 Tavros, Athens

Greece

Tel. +30 210 3423 287

Fax: +30 210 3452 098

E-mail: pasekt@ath.forthnet.gr

E.K.E. - Greek Canners Assciation

P.O. Box 5 - Kopanos - Naousa – Imathia

Greece GR-590 35

Tel.: +30 233 2043237

Fax: +30 233 2043006

E-mail: eke@delcof.gr